Some investments in the stock market have earned 10% annually. At this rate, earnings can be found using the formula , where A is the total value of the investment, P is the initial value of the investment, and n is the number of years the money is invested. If $1,500 is invested in the stock market at this annual rate of return, what is the expected total value after 18 years?
To find the total value of the investment after 18 years, we can use the formula:
A = P(1 + r)^n
Where:
P = $1,500 (initial value of the investment)
r = 10% or 0.10 (annual rate of return)
n = 18 years
Plugging in the values:
A = $1,500(1 + 0.10)^18
A = $1,500(1.10)^18
A = $1,500(6.727499)
A = $10,091.25
Therefore, the expected total value of the investment after 18 years would be approximately $10,091.25.